Ann Arbor Real Estate Talk

“What’s that smell?”

“I smell a cat?”

“A smoker lives here”.

These are some of the first questions out of a buyers mouth when they enter a home in Ann Arbor, they are viewing as a possible purchase.

 Be careful of odors in your home. If your family room smells stuffy and stale, or if your cat or dog has left a distinctive odor in the hallway, take action by eliminating the source of the odor rather than merely treating the effects.

Smells have a powerful effect on the way people react to a house, and no amount of room freshener or vanilla on the light bulbs can mask a serious odor problem.

In fact, such remedies may draw attention to the problem. We have seen homes in Ann Arbor with an odor problem languish unsold on the market for months or sell for significantly less than comparable homes in the neighborhood.

I once had to tell a client who had lived there all her life and smoked that we needed to have then entire house painted and carpet replaced. I didn’t like to do that, but better to hear if from me first, since I knew what the feedback would be and how long it would take to sell.

If you are getting ready to put your home on the market, make sure it smells good. Buying a home is an emotional decision and a bad odor can turn a perspective buyer off.

Bad odors = lower price, longer marketing time.

Fresh and clean odors= higher price, shorter marketing time.

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I found a really cool YouTube yesterday, and it is being circulated on a lot of social networks. Sometimes we make this business so hard. When it is really quite simple. Many of the homes in Ann Arbor are priced correctly;however, many are still sitting on the market.

The average days on the market in Ann Arbor is 92.That doesn’t sound too bad, right? But, this is the average. Those homes that are selling are “priced to sell”.  In my experience the last 13 years, regardless of location,  condition, any home will sell if priced correctly. For instance, if you have a home that backs up to railroad tracks, some buyers will find that lot less desirable. So you can’t price it where other homes in the neighborhood are at the same price. But, if you sell it for less, it overcomes the obstacle.

Because the inventory is high, and their are more homes available, buyers are “unforgiving” in what they will accept in a home. Regardless, it all comes down to price.

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My good friend, Jeff Belonger, recently wrote a post on Active Rain. Active Rain is a Real Estate blogging community of over 60,000 Realtors, Lenders, Home Stagers, Builders, Brokers, Feng Shui Specialists.

I have been following Jeff’s posts for over a year. He is most definately the FHA Expert.

Last night Jeff wrote a post on FHA Bill Passing in the U.S. Senate. I asked him if I could copy it here for the Ann Arbor community. The last several years many lenders moved away from doing FHA Loans. Most of them wrote what were 80/20 loans or 80/10/10 loans.  Rates were low so that is what their recommendation was for most buyers.

Here is Jeff’s post on the FHA reform working its way into law.

today - 12/14/07

Today the Senate passed the FHA Modernization bill aka the FHA reform bill. This bill is the  American Homeownership Act of 2006 (H.R. 5121) which has been through several approval stages since its inception. This bill now heads back to the House for “reconciliation” before heading to the White House where President Bush has his pen inked, ready for his signature.

In regards to everything that has happened this year; the subprime meltdown and just recently the fannie mae & freddie mac (by Rey Gallegos), this is a huge lift for the mortgage industry.

So what are these changes going to be in the near future? Tim Bradford explains it all hear. Proposed change to FHA MIP scheduled for change Jan 1, 2008.  But I will give you a quick breakdown from a source close to this issue. The new bill would :

• Increase the fha mortgage limits. There are still mixed reviews on what direction will be finalized when the bill is signed by the president. HUD has proposed that they use $417,000 across the board. And in high cost areas, keeping that number around $500,000 and in low cost areas around $290,000.  The old calculation was a little more complexed. FHA’s current loan limits for high-cost areas are derived from 87% of the government sponsored enterprise (GSE) and in lower-cost areas are 48% of the conforming loan limit. The other side of the new proposal would be that HUD uses 95 to 100% for the high-cost areas and 65% for the lower-cost areas. Which would be better?  Keeping the main number at $417,000. But either way would be a huge improvement over what we currently have.

• The original bill was looking at zero down payments. But what seems to be on the horizon is that they will be lowering the down payment of 3% to 1.5%.

• Allow FHA to offer another type of term, such as a 40-year mortgage. This would serve two different purposes. It would make it easier for someone to qualify for a little more of a house while keeping their payment the same if the house value was less. Or, it would just give them a cheaper payment if comparing the same price of a home.

• Also allow FHA to price borrowers accordingly to the credit risks that are described in Tim Bradford’s post mentioned above. Even though this is defined as risk base pricing, something that we have seen with the conventional market just recently, this will still be cheaper for everyone involved. How this will work? Those with least amount of money down and with the lowest credit scores will pay the highest premium. You might think that this is negative, but it really isn’t. Right now, the premium adjustment, which is called One-Time Mortgage Insurance Premium, is only 1.5% of the base loan amount. There is talk that they would raise it to 3% as a maximum. Again, this is not as bad as it seems because back in the mid ’90s it was 3%. It’s been lowered 3 times since then.

Some interesting facts in regards to previous loan amounts :

• FHA has been priced out of many area housing markets. In California, FHA insured only about 5,000 home mortgages in 2005, down 95 percent from 109,000 in 2000.

My Opinion :  Will there be a Negative Impact?   Yes. Those lenders and loan officer’s that don’t know the basics of FHA financing prior to the new bill being approved. And those lenders that are trying to get FHA approved now so they can jump into the game. Why will this be negative?  I can say that I know for a fact that there were many loan officers that didn’t take their client FHA because conventional delegated underwriting and subprime was easier. I even worked with some that even told me so. But the end result? This will be very positive for so many Americans.  Even those that have 660 credit scores, FHA will be better now.

I would have to estimate that over 80% of the FHA loans approved are approved manually. Which means that you just can’t fool an underwriting system. An underwriter has to physically review the income, assets, and most of all, the credit. It has to make sense and most of all, that underwriter’s license could be on the hook. Keep in mind, it costs the lender money to be FHA approved, hence why so many never signed up in the past. But now so many want to jump onto this fast moving vessel that will be sailing into the sunset. The ship that might just ridden some of this mess that was created in the last several years. Make sure that you speak with an FHA Expert and not someone claiming to be part of this elite crew.

Some key FHA tips :

• Shoppers that shop themselves right out of the market……

• FHA Shopping, rate shopping, fee shopping…. call it what you want, just be careful!!!

• Good Faith Estimate  –  What to look for when shopping……

• No Closing Cost Loans VS Closing Cost Loans

• FHA - Conventional - APR vs Rate –  Understanding the difference……

• FHA origination fee and what it means……

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Contrary to what the print media will tell you, it is a great time to buy a house in Ann Arbor, MI.

The surrounding area’s of Saline, Dexter, Chelsea, Ypsilanti, Manchester and any place in Washtenaw County has fantastic home buying opportunities.

The interest rates are still incredibly low. If you have good credit 0% financing is still available.

I just refinanced my own home, combining my Home Equity Line of Credit. (HELOC) and my primary mortgage into one 15 year rate at 5.75%.

Currently, we are still getting calls for Pfizer homes, and the MAJORITY of these are sold.

Many of my clients work with Maria Labie at Citizens First Bank for  their loans. As a banker she is able to hold many loans in portfolio that don’t meet Fannie Mae or Freddie Mac guidlelines.

As of March 1st, 2008 many of the guidelines will be changing.

FICO score < 575, regardless of LTV or AUS response

·         No Documentation (No Doc) Loans

·         No Income No Asset (NINA) Loans

·         Alt A loans with Non Traditional Credit

·         Alt A loans with a FICO score < 660

·         Property Inspection Waivers (PIWs) or Property Inspection Alternatives (PIAs)

*** If you are in the market for a new home, condo, or move-up don’t wait too long. You can begin your search of all the houses listed in Ann Arbor by clicking here.

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 It has been said that people don’t want to be SOLD, they want to buy.  Years ago when I first started my career in Real Estate, I was interviewing different companies around Ann Arbor, and Saline, Mi. I was looking for the “right fit” for me. That meant “no cold calling”, “no knocking on doors”.  Shortly after, when I started working with buyers, I discovered that wonderful little secret.

My little secret that has made my life fun (most of the time) is that my job was to just introduce people to the homes that matched their criteria and they would either “fall in love” with the right house or move on.

It completely takes the pressure off of me. There is nothing you can do to fall in love and there is not much you can do to stop it. The experts say that the first thing we fall in love with is the physical appearance of the other person, the way they walk or talk, their personality. It is a strong instinctive attraction. It is very physical, and often times we don’t really know why at first.

Buying a house is often like that. You have been out showing homes all day, and found a couple of “possibilities”. Which means they would work for them as far as the floor plan, location and price.

Then it happens, Mr. and or Ms Buyer walk in a home and bang it hits them over the head. This is it ! Excitement is all over their faces. Gone is the logic, of yes this will work, it is the right location, the right price. Sometime it is even higher than they wanted to go. But, they have “fallen in love”.  People buy with emotions and then justify the price.

Often the decision makes no sense to us, because we’re not in love. In fact, logic many times goes out the window. Do you whip out a purchase agreement?  Do you say, “Lets, go back to the office and write this house up, and get it under contract?”

This is not some new revelation, we have all experienced it with our buyers. The lights go on, their pulse increases. At this point, all logic goes out the window. Sometimes like in a relationship it is really not the right house for them. But, nothing will stop them. They have found their house and they are in love.

What have I learned over the years as I discovered this, “little secret”.

1)  One man’s junk is another man’s treasure. Many houses I have sold over the years, didn’t appeal to me at all.

2)  Keep my mouth shut about certain features that they may love and I would never live with.

3)  Keep looking until the lights go on.

4)  For my sellers, I encourage them to take every offer seriously, even a low ball offer. If they care enough to sit down and write an offer there is some emotion involved.

5)  There are all kinds of people and tastes, and internally they know when they have found the “right house”.

6)  Unless there is some major requirement that is missing, don’t try to talk them out of it. (like we need to be 10 minutes to the hospital). Then I would point it out, “this is over 10 minutes to the hospital, are you ok with it being 20 minutes)

7)  That I am not a salesperson, but a match maker. In Jewish literature called a shadchan.

This completely takes the pressure off of me. I love seeing the lights come on. 

Yesterday I closed on 3 houses, two I would not have lived in. But, at the settlement everyone was happy. The sellers were thrilled that the buyers were in love with their former homes. The excitement was still there, the  buyers couldn’t wait to move in. Ahh…….all in a days play, opps work !!

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Home Owners Associations are a love-hate relationships.

What?

People that live in residential communities are usually governed by HOA (Home Owner Association) rules and regulations. In Michigan, on our Purchase Agreements Realtors check the box that the buyer will review the HOA Documents, or their attorney will review the association documents within so many days.

Not a problem, it is a standard business practice here. People want to know what the rules and covenants are prior to proceeding with the purchase of a new home. Can I have a pool? Does it have to be in the ground or can it be above the ground? How many pets can I have? If I want to add a garage, can I? Who approves any design changes? Etc…

In most of the nicer subdivisions you have to get permission from the board for any improvements.  My experience in my own subdivision is the people who run for the board, have no pets and no kids. They take it upon themselves to police the neighborhood. Why don’t they go volunteer at a non-profit if they have so much time on their hands ?

Tonight I had a call from one of the board member in Hunters Ridge Subdivision. It was ironic as I was going to be writing a post on HOA anyway. She called to ask, “What is the ramp in your front yard?”

So I told her about Allyssa and that is was temporary. I said do you really think I would have put up a ramp like THAT, if it was really not necessary? She was very nice about it, but give me a break! I’m not that stupid. Maybe I should have mentioned the Handicapped and Disability Act, and that it is a protected class in Michigan. I asked her if anyone had complained and she said one person had called her to ask about it. But, our annual meeting is coming up in September and she wanted to be prepared to answer if it came up again.

Several years ago, one of my neighbors was going to use brick pavers in their drive-way and they were at the end of their drive-way too long. So they slapped a big lien on their house. I also had a neighbor that her husband was with Ford. He was transferred shortly after they built their house for a year. They had a friend living there to take care of the place. He moved out about a week before they returned and the HOA had a lien on their house, because the grass was too long. Welcome Home Neighbors!

I know rules and regulations are good, they keep people from putting farm animals and trailers on the property. We all want our neighborhoods to look good. But, give me a break.

HOA rules are only as good and as gracious as the people who enforce them. See what I mean by a love-hate relationship?

I bought a condo for my two sons, a couple of years ago in TN. I kept asking my realtor for the Association By-laws, and she said I would get them at closing. Had a read them I would not have bought the condo. Two sons, who like to play guitar and sing at night. Needless to say, I sold the place after a year. Too many letters telling me they were too loud. No electric equipment, just acoustic guitars and in Nashville!

Last year I had a client from Maryland. She asks me to please not show her houses in a neighborhood where the neighbors were nit-picky. Now how do you deal with that?

What is your experiences been with HOA?

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Hi Tom and Michelle,

Thanks for visiting my web site: Search Ann Arbor Area Homes and contacting me about your move to Saline, MI  As a mother of five children who has been in the Saline School System for many years,  I can tell you I am very pleased with the education my children have received.

Here are several web sites you might want to check out, since you are considering moving to Saline.

Saline Area Schools

Saline Chamber of Commerce

Also I have written many blog posts about Saline, MI and our schools. You will especially enjoy the one where Saline Schools were ranked in the top 16% of the nation. The City of Saline was also ranked in the Top 100 Best Places to Live by Money Magazine.

You mentioned in your email that you would like your two children to be able to walk to school. We have two new subdivisions in Saline, called Centennial Park and Centennial Farms. Both of those are within walking distance to the new Heritage School.

I have included three homes that I think you would be interested in and that your children would be able to walk to school.

1035 Bicentennial, with 3558 square feet, includes a finished basement. This home is priced at 399,900. Walk to Heritage School. Views of protected wet lands, walk-out LL with 3rd bath. Two story great room with soaring ceilings.

6439 Wilson, with 2404 square feet, priced at 389,700. You can still pick your colors and cabinets. Walk to Heritage School. First floor master bedroom suite, 3 car garage, and two story family room. 9 ft basement walls for finishing off at a later date.

6176 Wilson, with 2447 square feet, priced at 339,900. Plus a finished basement. Walk to Heritage School. Professional landscaping, and a view  of the pond are one of the highlights of this home. First floor study, formal dining room and generous size bedrooms. This home is really priced very well.

I believe these homes fit your price point, square footage requirement and the children being able to walk to school.

Before your trip to Saline, next weekend, I am including my list of preferred lenders. Please call any or all of them. I can promise you great customer service and many programs to choose from. I have worked with each one of the lenders over the years and can recommend them without hesitation.

Maria Labie

Citizens First Bank

734-353-0505

MLabie@cfsbank.com

Kay VanOrman

Wells Fargo

734-213-8981

S.Kay.VanOrman@WellsFargo.com

Sandy Stanford

GMAC Mortgage

888-648-4622

Sandra.Stanford@gmacm.com

I look forward to meeting you both. We will have a good time, as I love to show off my home town and community. I know you will find Saline to be a warm, and welcoming community. My husband and I like to joke that Saline is the most doting, family community in Washtenaw County.

I will pick you up at the Marriot at 10:00 on Friday the 29^th and we can start our tour at that time. Please send me your top 10 MLS numbers at least 48 in advance so I can confirm they are still available and set up the tour. Don’t hesitate to me if you have any questions.

Warmest Regards,

Missy Caulk & TEAM

RE/MAX Platinum-Ann Arbor

Direct Line: 734-302-1500

Search other homes at this wonderful site with Google satellite images, Google maps and many photos.

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